2020 has now officially come to a close, and COVID-19 vaccines are making their way around the world, but there’s still a lot of uncertainty. That means there may be hurdles to booking travel as well, even though airlines and travel-related companies are billing it as a comeback year.
If you’re getting antsy and you’re ready to plan a trip, but you do worry about uncertainty, you can protect yourself with travel insurance. With that being said, travel insurance isn’t always what it seems.
The situation is similar, for example, if you’re in a motorcycle or car accident and your insurance company drags its feet on paying your claim, or the other party’s insurance doesn’t want to pay. Travel insurance companies are still businesses, and their goal is to pay out as little as they can.
Like most types of insurance, you need to read the fine print and be sure of what you’re getting as well as what you’re not getting.
The following are some of the main things to know about travel insurance if you’re thinking about booking a trip this year.
How Does Travel Insurance Work?
You may not have ever used travel insurance before, or maybe you’ve bought it in the past but never used it.
Travel insurance is something you buy in addition to the rest of your trip costs that will protect you from different risks and losses that might happen leading up to travel and while you’re traveling.
The benefits vary significantly by the plan. You need to find a plan that works for your budget and needs, and the more coverage, the more expensive.
Travel insurance doesn’t cover every single thing you run into while traveling, but it can cover quite a few.
The objective of travel insurance is to cover events that are considered unforeseeable. This means it doesn’t typically cover those things you could have easily figured out were going to impact your trip or things within your control. If you waited to book a beach trip until after a hurricane was heading toward your destination, it’s unlikely your losses will be covered.
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Do You Need Travel Insurance?
The question of whether or not you need travel insurance depends a lot on how much financial risk you’re willing to take and also the type of trip you’ve booked. If you’ve booked a trip that’s inherently flexible or easily canceled with no penalty, then you probably won’t benefit much from travel insurance.
You might still need it in those situations if you want medical coverage, but if you’re staying in the United States, your health insurance should provide coverage even if you’re in a different state.
If you’re going abroad, even if what you’ve booked can be refunded, you may still want travel insurance in case you do get hurt or sick.
Most travel insurance plans can be purchased for specific purposes without paying for what you don’t need. For example, if you’re worried about needing emergency care, you might just want a travel medical plan and perhaps emergency evacuation coverage.
How Much Will It Cost?
If you buy a comprehensive travel insurance plan, expect to pay anywhere from 4% to 8% of the total cost of your trip.
Factors influencing price include the cost and length of your trip and the medical coverage you want. How old you are and the number of risks covered will make for more expensive travel insurance.
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Types of Coverage
Travel medical insurance is one type of coverage you might buy that provides you with health coverage while you’re traveling. These plans are similar to traditional health care coverage, but you can’t use them for routine care.
Another popular type of coverage is trip cancellation, interruption and delay. This coverage will reimburse you for nonrefundable expenses if you cancel your trip for a covered reason or if the operator of your tour or trip goes out of business.
There are coverage options for your baggage and personal belongings. For example, if your baggage is lost or damaged during your trip, you may receive some reimbursement.
Finally, what a lot of travelers are opting for is cancel for any reason coverage. This is usually an add-on to everything else. It gives you the freedom to as the name implies, cancel your trip for any reason. However, you may not get 100% reimbursement with additional cancel for any reason coverage. A lot of plans will provide a 75% reimbursement.